I find that with my Palm using a dictionary, while possible and even automated (highlight a word in mobipocket and use the menu to look it up) is a pain. I find that when I use a dictionary, I like to look at the original AND the dictionary at the same time, so to satisfy me, some sort of split-screen capability would be necessary, where the original is shown at the top and the dictionary is shown at the bottom.
In the absence of this capability,I am happy to use the reader to read from and have a small paperback dictionary (gasp, a REAL book!
) with me to look up words as I go.
And the Reader's sluggish changing of books would make dictionaries hard to use while reading on the Reader until/unless the improve the processor (increase the speed as well as the capabilities) and use of screen real-estate. But of course, that will bring with it a loss of battery life, since faster processors use more energy as do more complicated screen controllers which would allow for split screens.